Trusts can be an effective, versatile tool in your estate planning. And you owe it to yourself – and to your family – to at least consider them. For example…
Are You Concerned About A Family Member’s Spending Habits? If you’re afraid a family member may squander his/her inheritance, a “spendthrift trust” might be advisable. Although the family member would still be the beneficiary, the assets would be managed by a trustee; the beneficiary wouldn’t be able to spend all the money. And in certain spendthrift trusts, the beneficiary’s creditors wouldn’t be able to touch the assets.
A Loved One With Special Needs? If you have an heir with special needs, he/she may have to depend on government benefits like Medicaid and Supplemental Security. However, if you leave behind too much money to your heir, those programs may not be available. You might consider a supplemental needs trust, which could assist a disabled person without making him/her ineligible for assistance.
Protecting Your Assets From Nursing Homes? Medicare doesn’t pay for nursing homes. So many wealthy seniors give away their money to qualify for Medicaid, which does. You might be better off transferring your assets into an irrevocable Medicaid trust, though, rather than giving them away. Only an Elder Law attorney can tell you for sure.
Want To Avoid Probate? If your estate plan consists only of a will, your estate will go into probate. And who-gets-what would be decided by a court…which can be both expensive and time-consuming. Not the legacy you want to leave behind. If, however, you’ve got a revocable living trust, your trustee could distribute assets to the beneficiaries you’ve designated.
Do You Have Estate Tax Concerns? If you’ve got money, federal estate taxes can hit you very hard. How hard? As high as 40%! You can transfer assets to your spouse…but if you’d like to transfer assets to others, there may be substantial penalties. However, an estate tax credit, or exclusion, allows you to transfer some assets before the estate tax kicks in. Right now, the exclusion is $5.43 million. Trusts can preserve what you’ve worked so hard to earn.
